Lesson for Startups: Money Can't Buy You Love
It's easy to understand why some people don't see how companies that develop social apps will be in business 5 minutes from now, let alone 5 years from now.
Color, a new app that was supposed to connect users using location-based pictures, launched in March of 2011 on Apple and Android devices. However, even with $41m raised from major VC firms backing the company, the launch was a bust.
Color had no base of users with which to connect. They failed to not only create a buzz within their target market, they did a poor job creating a need for their app. Users should have been clamoring for its release, but alas, we had no idea why we should want to use it, so of course we didn't care.
Bill Nguyen, chief executive, told FT Tech Hub "Within minutes of launching, we realized we should have launched on Facebook". That's a major oversight in your overall marketing plan. It doesn't matter how cool your product and/or service is, if no one knows about it, it doesn't matter. Even the most basic marketing plan considers a market strategy.
Ok, let's give the founders of Color a break. It's hard not to get overly excited when you can prove the algorithm behind your app works and it's been validated by $41m dollars. No one who has ever done it, doubts that it's hard work running a company. We should also be honest in that if we all could afford to make giant mistakes with other people's money, we would be way more adventurous as well.
To their credit, the executives at Color recognized the error of their ways - not having marketing and promotion strategies in place before launching their product - and have reset and are optimistic about their new and improved Facebook-dependent app.Continued on the next page